How to set up a taxibus service

What is a taxibus service?

A taxibus operates like a regular public bus service, but run by a licensed Hackney Carriage or private hire operator. Taxibus services must be registered with the Traffic Commissioner.

  • The service runs on a fixed route to a set timetable. This could be one journey a week, or multiple journeys each day.
  • The service collects passengers from designated stopping places.
  • Passengers pay a fare similar to a regular bus fare.
  • Passengers can use their concessionary passes.
  • The service must run as advertised, even if no-one uses the service.
When to use a taxibus
  • A replacement for a bus service that is no longer financially viable.
  • When there is a need for a regular journey on certain days or at certain times.
  • Where every timetabled journey is likely to have passengers. If a service is likely to run with no passengers, you might want to consider a taxishare service.
  • Ideal for passengers who are unable or do not want to book their journey in advance.

The contracting organisation will need to:

  • draw up a service specification
  • arrange a contract with an operator
  • track and review the service
  • manage user feedback
  • publicise the service
  • process invoices

The Taxi/Private Hire Operator will need to:

  • apply for a Restricted PSV licence
  • be licensed as a Taxi/Private Hire Operator for the District/Borough the service operates in
Typical costs

Many taxi operators will charge at their standard meter price.

If you want to contract the taxibus operator to run the service at a set price, you have two options:

  • The contracting organisation pays the operator the contract price, minus fares. This places the risk with the organiser. If passenger numbers are low, the amount paid to the operator is nearer the contract price.
  • The operator agrees to run the service for a fixed price and keeps any fares taken. This places the risk with the operator. If passenger numbers are low, the operator doesn't make a profit.

Whoever keeps the fares will receive reimbursement for passengers using concessionary passes.

Legal requirements
  • Taxibus operations are permitted under Section 12 of the 1985 Transport Act.
  • Any organisation can commission a service and contract an operator.
  • Operators may apply for a Restricted PSV Licence. This enables them to operate their taxi as a local bus service, charging separate fares along a registered route to a published timetable.
  • The timetable must be registered with the Traffic Commissioner. The operator should do this as they hold the relevant Restricted PSV Licence.
  • Any changes to the timetable must be registered with the Traffic Commissioner.
Next steps
  • Identify demand (number of people, journeys needed)
  • Calculate costs, budget and funding sources
  • Draw up and agree a timetable and service contract
  • Identify potential operator(s) and tender prices
  • Agree with the operator how the service will run
  • Ensure the operator applies for a Restricted PSV Licence
Further advice

Hampshire County Council Community Transport Team
Economy, Transport and Environment Department

Phone: 01962 846785

Case study
St Budeaux Taxibus

Two taxi firms operate the St Budeaux Taxibus. The service runs every 30 minutes on Monday to Friday, between housing estates in St Budeaux and the shopping area.

The taxibus collects passengers at defined bus stops. It also has a “hail and ride” section, where the taxibus will collect from any safe place. Passengers pay fares, similar to the bus fares in other parts of the area. Concessionary bus pass holders travel for free.